PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB5304 Project Name

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB5304 Project Name Bangladesh: NARI -- Northern Areas Reduction-of-Poverty Initiative Region South Asia (SAR) Sector Social Development (SASDI) Project ID P Borrower(s) PEOPLE S REPUBLIC OF BANGLADESH Implementing Agency 1) Ministry of Labor and Employment (MOLE) Building-7, 5th Floor Bangladesh Secretariat Dhaka, Bangladesh. Phone : , Fax: (Coordinating Agency) 2) Bangladesh Export Processing Zone Authority (BEPZA) BEPZA Complex House: 19/D, Road: 6, Dhanmondi, Dhaka, Bangladesh Phone : ; Fax : (Implementing Agency) Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared 30 November 2009 Estimated Date of 26 October 2010 Appraisal Authorization Estimated Date of Board 23 December 2010 Approval I. Key development issues and rationale for Bank involvement Bangladesh in recent years has experienced strong economic growth and made considerable progress in reducing poverty. However, it is still a poor country with an estimated 56 million people in poverty. The key challenge for the economy is to sustain current patterns of growth while continuing to reduce poverty and promote greater economic and social equity through a pro-poor growth development strategy. Key to the strategy is to increase the participation of women in the labor force, especially in the formal sector. Male participation in the labor force approaches 100% while that of women is only 26%, an extremely low rate even by South Asian standards. The ready-made garment (RMG) industry plays a unique role in this respect, generating 76% of Bangladesh exports, growing at 15-20% per year, and employing 3.1 million workers, 90% of them women. The evolution of the garment industry in Bangladesh since the early 1980s has been especially important in changing the role and status of women. It has provided the first substantial opportunities for women to participate in formal employment, and has brought both significant symbolic and real benefits. It has provided an alternative to early marriage, contributing to reductions in fertility and to improved health outcomes. It has helped narrow the gender gap in

2 employment and income. It has enhanced women s prestige, control over income and decisionmaking. It has served as a springboard to self-employment. At the same time, female participation in the garment industry remains ad-hoc and hazardous, with low wages, poor working conditions and weak bargaining power. Living conditions are precarious. Violence and crime are major concerns. The population is especially vulnerable: poor, young, illiterate, migrant, rural, unskilled and female. They are often removed from their support networks and are largely on their own, further increasing their vulnerability. There is significant unmet demand for skilled labor in the garment industry, estimated at 350,000 workers, which offers a remarkable opportunity, especially for women in the poorest regions that have been generally excluded from the sector. The northwestern Monga (drought-prone and seasonally food insecurity) region is a pocket of severe poverty, with almost half the population below the poverty line and 25% in extreme poverty. A majority of the working age people in this region remain jobless for half the year and many move to other parts of Bangladesh in search of work. As out-migration is already occurring from the northwestern region, supporting the transition of women to the garment industry, especially vulnerable women, from lagging areas such as this will promote connectivity to the growth poles of the economy and support the empowerment of women. Both the Government of Bangladesh (GOB) National Strategy for Accelerated Poverty Reduction and the Bank s Country Assistance Strategy strongly support poverty reduction through pro-poor economic growth and the empowerment of women. A program to support participation of women from poor areas in the garment sector would specifically address the recommendations of the 2008 Poverty Assessment for Bangladesh: (i) promote growth by sustaining increases in labor productivity and job creation in manufacturing; (ii) expand opportunities in lagging regions by improving connectivity with growth poles and investing in human capital; (iii) facilitate migration from poor areas given the poverty reduction impact of remittances; and (iv) stimulate women s participation in the labor force. Jobs for women in the garment sector are likely to increase without any Bank intervention given the dynamic nature of the industry. However, the current patterns that generally exclude vulnerable women from the poorest region of the country and the lack of support for easing the transition of vulnerable women migrants to the industry are also likely to continue in the absence of any intervention. Given the expanding RMG market, the abundance of cheap labor, and the high competitiveness in the industry, there is little reason to expect the private sector to address these concerns without external incentives. The Bank Group s current active involvement in the Bangladesh garment sector (especially IFC), the highly-regarded analytical work on women and female employment in the garment sector (Whisper to Voices, 2008), it's growing experience with preparing women for formal sector employment elsewhere in South Asia and globally, and it s focus on bringing a social development dimension to export-oriented growth make the Bank the logical partner for this project.

3 The proposed Welfare and Employment in the Garment Sector (WEGS) project would be the first Bank-financed operation in Bangladesh with a specific focus on the empowerment of women through employment in the formal sector. It would be a pilot project as no comparable effort has been initiated in Bangladesh apart from a DFID-funded project for the Chars (shifting islands in rivers) that aimed to ease the transition of women to industrial areas. The project has the strong endorsement of government, private sector organizations working in the garment sector, some prominent NGOs, other donors and the ultimate beneficiaries and their families; all of whom were consulted in preparation of the Project Concept Note (PCN). 1 II. Proposed objective(s) The overall goal of the project is to support GOB and Bank strategic objectives to (i) promote pro-poor economic growth by providing trained labor to the RMG sector; (ii) reduce poverty by focusing on the poorest region of the country; and (iii) encourage the empowerment of women. The specific project development objective is to: facilitate access to employment opportunities in the garment sector for poor and vulnerable women from the poorest regions of Bangladesh, by providing information, technical and life skills training, transportation, housing and other support to adjust to urban life and employment. III. Preliminary Description The proposed WEGS project would provide a support system along the entire supply chain of labor from the areas of origin of workers to employment in the industrial zones. It would facilitate the awareness, identification and selection of candidates, transport and accommodation, training in technical and life skills and other support at the receiving area, and guaranteed employment. The project will provide an orderly, managed and efficient mechanism to provide labor to the RMG sector that can facilitate greater stability in employment and better conditions for the workers. The project would consist of three inter-related components: Raising awareness and selecting candidates at the source areas. To facilitate the transition of women to the garment sector, an information, education and communication (IEC) and outreach program would be carried out to inform local populations of the project. It would be targeted to both women and men, as men have a significant role in determining women s mobility. An awareness campaign will also be carried out in receiving areas for employers, to stress their responsibilities and to sensitize them about the benefits of hiring better trained employees. The campaign will be prepared and implemented by a competent entity, and will be developed in consultation with the target audiences. The identification and selection of candidates would be managed through a transparent, objective and inclusive process. Objective criteria on income levels and education attainment 1 The PCN has also benefitted from a quick literature review.

4 would be applied during the selection process to ensure that poor and eligible young women are targeted. Out-migration is already occurring from the northwest region at an accelerating pace, so the principal goal would be to help identify particularly vulnerable women who could particularly benefit from a more managed process. The selection process would be facilitated by civil society organizations, village institutions and local government units familiar with the local community. Potential employers would have a major role in the selection of candidates, based on their business needs. x Establishing multi-purpose centers at the receiving points. Once candidates are selected and undergo an initial orientation, they will be transported to one of three areas envisaged under the project near the Export Processing Zones (EPZs) located in Dhaka, Karnaphuli and Iswardi. At these sites, the project would support the construction of dormitories for incoming workers and affiliated multi-purpose training centers for both new and existing employees, to provide ongoing support to employees. New workers would be accommodated for up to six months. The workers will be expected to pay for their accommodation depending on their capacity and other considerations. Employers will also contribute to housing and training costs. The project will focus on the EPZs for the following reasons in the pilot phase. First, the Bangladesh Export Processing Zone Authority (BEPZA) owns the land at the three sites, adjacent to the EPZs. No land acquisition or resettlement will be required in these sites, thus removing a major stumbling block to and reducing significant delays in the implementation of the project. 2 Initial designs for the facilities at the three sites have already been completed. Second, the three EPZs to be included in the project have high potential for employing women trained in the project. 3 Third, factories in the EPZs are subject to strict compliance with international labor standards, including on worker health and safety by international buyers. This will ensure a higher degree of well being and security for women included in the 2 However, an initial screening of the sites will be conducted to assess the possibility of any social impacts. In addition, Bank OP 4.01 on Environmental Assessment (EA) will be triggered due to construction activities for the dormitories and the multi-purpose centers, in order to assess the environmental impact of the construction activities, ensure construction standards, safety and disposal of waste materials. Based on the EA, an Environmental Management Plan with mitigation measures will have to be prepared by the implementing agency. 3 The Dhaka EPZ has demand for 30,000 additional workers. The proposed employment in the Iswardi EPZ is 16,000, while the current employment there is only 1,600. Over time, the Karnaphuli EPZ is expected to employ about 140,000 workers in the 74 enterprises which have been given permission to operate there. Moreover, there are hundreds of manufacturing industries operating in and around Dhaka and Chittagong which can potentially employ women trained in the project.

5 project. Fourth, factories in the EPZs are clustered by sector (as opposed to outside the zones). This provides a better system of incentives for collaboration among producers. x Providing continuing training and support. Once women arrive at the worksite, the project would prepare and support them for their lives and livelihoods in the garment industry through the multi-purpose training centers by including (i) transition to jobs opportunities beyond initial placement on arrival that would be guaranteed by factories, (ii) transport to and from dormitories and training centers and potentially in the surrounding community for workers living far from factories, (iii) counseling, (iv) securing accommodation after completion of the program, (v) continuing life skills training, 4 (vi) certification to allow workers to upgrade skills, (vii) day-care and (viii) health and hygiene. BEPZA will be responsible for providing the technical and life skills training in partnership with the two private sector associations of ready-made garment factories--the Bangladesh Garments Manufacturing and Export Association (BGMEA) and the Bangladesh Knitwear Manufacturing and Export Association (BKMEA), NGOs, private sector training providers and other competent organizations. These would be reimbursed based on training delivered and employee placement in factories. The proposed WEGS project could serve as a model for creating a uniform curriculum for skilled workers training, establishing commonly-agreed standards and creating an accreditation system that facilitates the training of young unskilled women into skilled workers. IV. Safeguard Policies that might apply Safeguard Policies Triggered by the Project Yes No TBD Environmental Assessment (OP/BP 4.01) [x] [ ] Natural Habitats (OP/BP 4.04) [ ] [ ] x Pest Management (OP 4.09) [ ] [x] Physical Cultural Resources (OP/BP 4.11) [ ] [ ] x Involuntary Resettlement (OP/BP 4.12) [x] [ ] Indigenous Peoples ( OP/BP 4.10) [ ] [x] Forests (OP/BP 4.36) [ ] [x] Safety of Dams (OP/BP 4.37) [ ] [x] Projects in Disputed Areas (OP/BP 7.60) * [ ] [x] Projects on International Waterways (OP/BP 7.50) [ ] [x] Piloting the Use of Borrower Systems to Address Environmental and Social Issues in Bank-Supported Projects (OP/BP 4.00) [ ] [x] 4 This will cover a range of life skills most likely required by young women in the garment industry and in urban settings such as negotiation skills, dealing with discrimination, workers rights education, do s and don ts at the workplace, reproductive health, basic financial management, control over the use of their own income, and mentoring and guidance. * By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties claims on the disputed areas

6 V. Tentative financing Source: BORROWER/RECIPIENT - MOLE - BEPZA ($m.) International Development Association (IDA) 20.0 Total 27.0 VI. Contact point Contact: Bhuvan Bhatnagar Title: Lead Social Development Specialist Tel: BBhatnagar@worldbank.org Location: World Bank Headquarters - Washington, DC

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